Microsoft temps sue for benefits

November 23, 1998
Web posted at: 11:30 AM EST

by Tom Diederich

(IDG) -- A law firm representing 10 current and former contract
workers at Microsoft Corp. filed a lawsuit in U.S. District
Court on Tuesday against the software giant, seeking
damages and full-time employee benefits for its plaintiffs
and thousands of other "misclassified" temporary
employees.

The 10 plaintiffs seek class-action status because they
want to include some 6,000 current full-time Microsoft
employees who have been "misclassified as
nonemployees" under "various erroneous labels" and
denied company benefits.

An attorney for the plaintiffs, David Stobaugh, said the action
builds upon a 1992 class-action lawsuit that launched the
Vizcaino v. Microsoft case, which is still open. The U.S.
Ninth Circuit Court of Appeals ruled that workers in this
class of so-called "perma-temps" are in fact "common-law
employees" of Microsoft. In 1997, the court ordered the
company to include these workers in its corporate savings
plan.

Last July, however, a U.S. District Court judge modified the
original class action to remove all employees hired by
Microsoft after April 1, 1990. This latest lawsuit was filed by
some of those employees.

Stobaugh said the new class-action lawsuit gives his
plaintiffs, who have all spent at least three years at
Microsoft, an opportunity to raise benefits issues excluded
in the Vizcaino case, such as company-paid health
insurance -- "which Microsoft denies to approximately 30%
of its workforce," he said.

The employees either receive their paychecks from
temporary staffing agencies or are paid as independent
contractors for jobs that include graphic artist, program
manager, programmer or editor.

"It's very odd. Some employees at Microsoft have become
extremely wealthy through their stock-option plans and that
soft of thing, and then they have another category of their
employees -- which is about 30% to 35% -- who don't even
get health care," Stobaugh said.

"We're seeking damages for the wrongful exclusion of the
benefits plan; we're seeking an injunction that requires them
to start classifying people properly and allowing employees
to participate in the employee stock-purchase plans,"
Stobaugh said. "In our view, they can't continue to operate
the way they're operating."

A Microsoft spokeswoman said the company hasn't seen a
copy of the lawsuit and therefore couldn't comment.
However, she did offer the company's view on temporary
employees.

"Microsoft basically uses contingent workers to
accommodate the need for a flexible workforce that would
arise based on seasonal or cyclical projects -- like a product
launch," said Microsoft spokeswoman Heidi Rothauser.
"They also use contingent workers to meet the need of
specific projects that may require unique skills that may not
be needed at the company on a long-term basis, such as
for pilot projects."

Stobaugh questioned Microsoft's use of the word "project" in
its explanation of temporary workers. "It would be like The
Boeing Co. calling the 747 its project," he said. "Well, of
course it is a project for Boeing, but that's what they do --
they make airplanes. And it's the same with Microsoft."

Although she wouldn't say how many temps were currently
on the job, Rothauser said that 70% of them have been
there less than a year, another 25% less than two years and
the remaining 5% more than two years.

"There are something like 3,000 open positions at the
company right now, and the temporary agency employees
are certainly able to apply for any position they feel qualified
for," Rothauser said. "And in many cases, they have an
edge because they're familiar with the work environment
and have had that first-hand knowledge."